Medicaid Explained

What Is Medicaid

Medicaid is a joint federal-state health insurance program for people with low incomes. It covers about 74 million people, which makes it the largest health insurance program in the country, and it reaches children, pregnant women, seniors, and people with disabilities. States run their own versions of it under federal rules, and the federal government pays most of the bill.

Most adults on Medicaid hold jobs that do not come with insurance. Half of all patients at children’s hospitals are covered by it, and so are four in ten adults under 65 who are being treated for opioid addiction.

How Medicaid Is Funded

The federal government and the states split the bill, and the federal share is set by a formula called FMAP, short for Federal Medical Assistance Percentage. For traditional Medicaid, Washington covers between 50% and 83% of the cost depending on how wealthy the state is, so Mississippi gets 76.6% while California gets 50%.

The adults added by the Affordable Care Act are financed differently. Anyone earning up to 138% of the federal poverty level, about $22,000 a year for one person, is matched at 90%, which leaves the state paying ten cents on the dollar.

Medicaid costs more per person than a basic insurance plan because it pays for care that private plans rarely cover. It is the primary payer for 63% of nursing home residents and covers 69% of home care spending in the country, the kind of long-term help that a commercial policy usually caps or excludes.

States raise their own share partly through provider taxes, which are levies on hospitals and nursing homes that the state then uses to draw down more federal money. The 2025 law bars every state from creating new provider taxes and forces expansion states to shrink the ones they already have, so the financing tool most states lean on is closing (Pew).

Which States Expanded and Which Did Not

The Affordable Care Act let states open Medicaid in 2014 to every adult earning up to 138% of the federal poverty level, with the federal government paying 90% of the cost. Forty states and the District of Columbia took the deal. Ten refused, and they are Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin, and Wyoming.

No state has expanded since North Carolina in December 2023. The 2025 law then removed the extra federal money for any state expanding after January 1, 2026, so the deal is effectively closed to the remaining ten.

Forty states and the District of Columbia expanded Medicaid. The ten holdouts cluster in the South.

Expanded (legislative)

Expanded (ballot measure)

Not expanded

Expanded (2014)

Source: KFF Status of State Medicaid Expansion Decisions, March 2026.

Medicaid Expansion by State

State	Expanded	Method	Status
Alabama	No	N/A	Not expanded. Coverage gap exists.
Alaska	2015	Legislative	Expanded
Arizona	2014	Legislative	Expanded
Arkansas	2014	Legislative	Expanded
California	2014	Legislative	Expanded
Colorado	2014	Legislative	Expanded
Connecticut	2014	Legislative	Expanded
Delaware	2014	Legislative	Expanded
District of Columbia	2014	Legislative	Expanded
Florida	No	N/A	Not expanded. Coverage gap exists.
Georgia	No	N/A	Not expanded. Coverage gap exists.
Hawaii	2014	Legislative	Expanded
Idaho	2020	Ballot measure	Expanded
Illinois	2014	Legislative	Expanded
Indiana	2015	Legislative	Expanded
Iowa	2014	Legislative	Expanded
Kansas	No	N/A	Not expanded. Coverage gap exists.
Kentucky	2014	Legislative	Expanded
Louisiana	2016	Legislative	Expanded
Maine	2019	Ballot measure	Expanded
Maryland	2014	Legislative	Expanded
Massachusetts	2014	Legislative	Expanded
Michigan	2014	Legislative	Expanded
Minnesota	2014	Legislative	Expanded
Mississippi	No	N/A	Not expanded. Coverage gap exists.
Missouri	2021	Ballot measure	Expanded
Montana	2016	Legislative	Expanded
Nebraska	2020	Ballot measure	Expanded
Nevada	2014	Legislative	Expanded
New Hampshire	2014	Legislative	Expanded
New Jersey	2014	Legislative	Expanded
New Mexico	2014	Legislative	Expanded
New York	2014	Legislative	Expanded
North Carolina	2023	Legislative	Expanded
North Dakota	2014	Legislative	Expanded
Ohio	2014	Legislative	Expanded
Oklahoma	2021	Ballot measure	Expanded
Oregon	2014	Legislative	Expanded
Pennsylvania	2015	Legislative	Expanded
Rhode Island	2014	Legislative	Expanded
South Carolina	No	N/A	Not expanded. Coverage gap exists.
South Dakota	2023	Ballot measure	Expanded
Tennessee	No	N/A	Not expanded. Coverage gap exists.
Texas	No	N/A	Not expanded. Coverage gap exists.
Utah	2020	Ballot measure	Expanded
Vermont	2014	Legislative	Expanded
Virginia	2019	Legislative	Expanded
Washington	2014	Legislative	Expanded
West Virginia	2014	Legislative	Expanded
Wisconsin	No	N/A	Not expanded. Coverage gap exists.
Wyoming	No	N/A	Not expanded. Coverage gap exists.

Adults in the ten non-expansion states are almost twice as likely to be uninsured.

Uninsured rate

Period	Value
Non-expansion states (2024)	14.5%
Expansion states (2024)	8.0%
Change	-6.5 pts

In most non-expansion states, an adult with no children has no Medicaid pathway at any income. A single adult in Texas earning $5,000 a year is counted as too well-off to qualify, because Texas sets adult eligibility near zero and offers nothing above it.

That leaves 1.4 million people in what researchers call the coverage gap, earning too much for their state’s Medicaid but too little for the subsidies that make marketplace plans affordable. More than a million of them live in Texas, Florida, and Georgia (KFF).

Every measure that tracks whether people can get care runs worse in the ten states that refused.

Four states crossed the line recently enough to measure what changed, and three of them did it by ballot measure after their legislatures refused to act.

Uninsured rates fell in every state that expanded, and enrollment beat the state’s own projections in three of four.

Those same ballot measures are now the target. Republican lawmakers in Missouri, Oklahoma, and South Dakota have moved to put expansion back before voters, and the South Dakota measure already approved for the November 2026 ballot would end expansion there if the federal match ever drops below 90% (Stateline).

Expansion Lowered Deaths and Kept Hospitals Open

Mothers die less often in states that expanded Medicaid. Expansion states record 20.7 maternal deaths per 100,000 live births against 26.0 in non-expansion states. Coverage after delivery is a large part of why, because more than a quarter of Texas maternal deaths happen between 43 days and one year after pregnancy, a window Medicaid pays for in expansion states and Texas does not.

Infant deaths moved in opposite directions. Infant mortality in expansion states fell from 5.9 to 5.6 per 1,000 live births. In non-expansion states it rose, from 6.4 to 6.5, so the gap between the two groups widened from both ends at once.

Rural hospitals stayed open where states expanded. Rural uninsured rates in expansion states fell from 16% to 9%, nearly halving. Most rural hospital closures have happened in states that refused, with Texas losing 15 hospitals, Tennessee 9, and Georgia 7.

About half of all rural hospitals are running at a loss, and 10 million rural Americans depend on Medicaid.

Cancer outcomes follow the same pattern as the maternal and rural numbers. Young adults newly diagnosed with cancer survive two years more often in expansion states, and the effect is strongest for Hispanic and Black patients.

Congress Cut $911 Billion From Medicaid

President Trump signed the cut into law on July 4, 2025, and the rules have been landing ever since. CMS sent states guidance in December 2025 and a binding regulation in June 2026, while Nebraska began enforcing work rules on May 1, 2026 and cut the first people off that July. Twenty-five states and the District of Columbia sued to stop the rule in June 2026 and lost their first bid to pause it a month later, so every remaining expansion state has to be running the requirement by January 1, 2027.

Every expansion state has to be enforcing work rules by January 1, 2027.

1. July 2025 Trump signs the $911 billion cut The One Big Beautiful Bill Act cuts federal Medicaid spending by $911 billion over ten years.
2. Dec 2025 CMS sends states first work-rule guidance States get their first written instructions for verifying 80 hours a month.
3. May 2026 Nebraska enforces work rules first Nebraska becomes the first state to apply the new requirement, months before the deadline.
4. June 1, 2026 CMS issues a binding work-rule regulation The interim final rule sets national terms and takes effect July 31, 2026.
5. June 29, 2026 25 states and DC sue over the rule The states file in federal district court in Massachusetts and seek a pause.
6. July 2026 Judge lets the work rule take effect Judge Richard Stearns denies the pause and orders expedited briefing on the merits.
7. Jan 2027 Work rules required in 40 states and DC Every expansion state must verify 80 hours a month for adults ages 19 to 64.

Sources: CMS; KFF Medicaid work requirements tracker; Stateline; Nebraska Public Media.

From signature to deadline, 2025 to 2027: July 2025 — Trump signs the $911 billion cut (The One Big Beautiful Bill Act cuts federal Medicaid spending by $911 billion over ten years.). Dec 2025 — CMS sends states first work-rule guidance (States get their first written instructions for verifying 80 hours a month.). May 2026 — Nebraska enforces work rules first (Nebraska becomes the first state to apply the new requirement, months before the deadline.). June 1, 2026 — CMS issues a binding work-rule regulation (The interim final rule sets national terms and takes effect July 31, 2026.). June 29, 2026 — 25 states and DC sue over the rule (The states file in federal district court in Massachusetts and seek a pause.). July 2026 — Judge lets the work rule take effect (Judge Richard Stearns denies the pause and orders expedited briefing on the merits.). Jan 2027 — Work rules required in 40 states and DC (Every expansion state must verify 80 hours a month for adults ages 19 to 64.).

July 4, 2025: Trump signed the One Big Beautiful Bill Act, which reduces federal Medicaid spending by $911 billion over ten years. The Congressional Budget Office projects 10 million more people uninsured in 2034 as a result, 7.5 million of them through Medicaid.

December 8, 2025: CMS issued its first guidance telling states how to verify that expansion adults ages 19 to 64 are working, volunteering, studying, or training for at least 80 hours a month.

May 1, 2026: Nebraska became the first state to enforce the requirement, ahead of the federal deadline and before most states had built the systems to check hours.

June 1, 2026: CMS issued an interim final rule that made the terms binding nationwide, effective July 31, 2026. The agency projects the requirement will remove about 2.3 million people from Medicaid in fiscal 2027.

June 29, 2026: Twenty-five states and the District of Columbia sued in federal district court in Massachusetts, arguing that the rule stretches the authority Congress gave the Department of Health and Human Services and strips protections for people too sick to work.

July 29, 2026: Judge Richard Stearns denied the states’ request to pause the rule, calling the case difficult but saying the questions need a fuller record. He set an expedited schedule so the merits can be decided before January 1, 2027.

January 1, 2027: Every one of the 40 expansion states and the District of Columbia must be running the requirement. The HHS secretary can grant a state an extension to December 31, 2028, but CMS has said extensions are for extraordinary problems only.

Four states moved before the federal deadline. Nebraska went first on May 1, 2026, and Montana followed on July 1. Iowa starts December 1, while Arkansas began a soft rollout in July that cuts nobody off before January 2027. Six governors, in Oregon, Michigan, Washington, New York, Maine, and New Mexico, have pushed back publicly, arguing they lack the guidance and the time to build a system that will not drop eligible people by mistake.

Nebraska’s first cutoffs landed on July 31, 2026. The state Medicaid director put the first group at roughly 200 people, and Nebraska Appleseed estimates that up to 40,000 Nebraskans could lose coverage as the phase-in runs through June 2027.

Georgia has been running the country’s only other work requirement since 2023, and it is small. Pathways to Coverage enrolled about 8,000 people against a state projection of 47,000, and its waiver expires December 31, 2026 with a request to extend it through 2030 still pending in Washington.

The law left the 90% expansion match itself untouched, and that is what keeps a set of state trigger laws dormant. A dozen states wrote trigger laws that change or end expansion if that match ever falls, and nine of them end it automatically, including Arizona, Arkansas, Illinois, Indiana, Montana, New Hampshire, North Carolina, Utah, and Virginia. Utah rewrote its trigger in 2026 to require a plan for keeping coverage instead of an automatic cutoff.

Congress paired the cut with money for the places it hits hardest. CMS awarded the first year of a $50 billion Rural Health Transformation Program to all 50 states in December 2025, averaging about $200 million per state, with awards running from $147 million in New Jersey to $281 million in Texas. The fund is $50 billion over five years, set against an estimated $137 billion in rural Medicaid reductions over ten. Our brief on what the $911 billion cut hits first tracks the schedule state by state.

Who Loses Coverage and How

Arkansas ran the same reporting requirement in 2018. Adults ages 30 to 49 had to report 20 hours of work a week to keep coverage, and in seven months more than 18,000 people lost it, close to one in four of everyone subject to the rule.

Employment did not rise. Benjamin Sommers and colleagues followed the program for 18 months in the New England Journal of Medicine and found no employment gain, while a third of the people covered by the rule had never heard of it. A federal judge halted the program in March 2019, by which point Arkansas had spent about $26 million running it.

The people who lost coverage in Arkansas then went without care. 55.9% delayed care because of cost, 63.8% delayed taking medications, and half reported serious trouble paying medical debt. Adrian McGonigal was one of them. The chicken plant worker reported his hours once, did not know the report was monthly, and died in 2024 at 46 after repeated hospitalizations for COPD he could no longer treat.

Nebraska is where the same rule is landing now. Schmeeka Simpson has relied on Medicaid since 2014 and already lost SNAP benefits once when a technical error caused her to miss a renewal, and she fears the same paperwork will cost her health coverage.

Georgia shows what happens even when someone does everything right. Luke Seaborn appeared in a state promotional video for Pathways, logged his hours every month, and still had his benefits canceled twice by bureaucratic error. “I used to think of Pathways as a blessing,” he told ProPublica. “Now, I’m done with it.”

The paperwork is the barrier, not the work. During the unwinding of pandemic-era continuous coverage, 18.22 million people were disenrolled and 70% of those disenrollments were procedural rather than a finding that someone no longer qualified. In Kentucky, Beverly Likens lost Medicaid days before surgery for chronic uterine bleeding and needed a lawyer to get reinstated. In Florida, Indira Navas found that her 6-year-old son had been dropped while her 12-year-old daughter in the same household kept coverage.

Children lose coverage when their parents do, even when the rules exempt them. A Manatt analysis estimates 480,000 children will lose Medicaid if work requirements apply to expansion adults, rising to 914,000 if they are extended to all nondisabled adults. Roughly five children lose coverage for every 100 adults who do.

The count is already falling. Two million fewer children are enrolled than in January 2025, and 25 states now sit below their pre-pandemic children’s enrollment. In Wisconsin, Codie Peschl lost coverage she had held for 17 years. She is a home health caregiver earning $17.50 an hour, and her wage ran $433 a month too high for her own eligibility while staying low enough for her three children to keep theirs.

Our reporting on the work requirement deadline follows what states are telling enrollees and what to do if a notice arrives.

Common Misconceptions About Medicaid

Medicaid and Medicare are different programs. Medicare covers people 65 and older regardless of income, and Medicaid covers people with low incomes at any age. 84% of Medicaid-covered nursing home residents are enrolled in both.

Expansion coverage is subsidized, not free. Most states charge expansion enrollees premiums, copays, or both, and the federal government covers 90% of the remaining cost while the state pays 10%.

Most adults on Medicaid work. 64% are employed and most of the rest are caregiving, ill, disabled, or in school, which leaves fewer than one in ten out of work for any other reason.

Expansion is reversible in a dozen states. Trigger laws there change or end expansion if the 90% federal match drops, and nine of those states end it automatically without a legislative vote.

Closing hospitals shifts costs rather than saving them. Non-expansion states still pay for uninsured emergency visits through uncompensated care, so they spend more per person to cover fewer people. Virginia projected $290 to $480 million less in hospital uncompensated care after it expanded.

The Honest Disagreement

Serious people disagree about how Medicaid should be financed, and the argument is narrower than the headlines suggest. It turns on two things, the 90% federal match for expansion adults and the way states raise their own share.

The case for cutting comes from the Paragon Health Institute and its president Brian Blase, a former White House health policy adviser. They argue that a 90% match pays states more to cover working-age adults than to cover children and people with disabilities, that provider taxes let a state manufacture its share rather than fund it, and that at a 90% match $100 in state financing maneuvers pulls in $900 in federal money. Paragon has proposed phasing the expansion match down to each state’s regular rate by 2034.

The case against those cuts comes from KFF, the Center on Budget and Policy Priorities, and most state Medicaid directors. They argue that provider taxes are a legal financing tool CMS has approved for four decades, that enrollment tracks real need in a country where employer coverage keeps shrinking, and that removing federal dollars removes neither the patients nor the cost of treating them.

The budget squeeze is real on both accounts. Almost two-thirds of state Medicaid programs told KFF that a shortfall in fiscal 2026 was at least a coin flip, and Medicaid runs close to 30% of the average state budget while medical costs keep climbing. Where the two sides split is whether the fix is less federal money or more.

We do not call a winner on the financing question. The record on work requirements is thinner and more one-sided, because Arkansas is the only state that has run one at scale and employment there did not rise.

Frequently asked questions

Will I lose my Medicaid? It depends on your state and your eligibility category. Children, pregnant women, and people with disabilities are not subject to work requirements. If you are an adult covered through expansion, you will need to document 80 hours a month starting January 1, 2027, or earlier if your state moved first.

What counts toward the 80 hours? Paid work, self-employment, community service, job training, and school all count, and states may combine them across a month. Your state decides which records it will accept, so check its Medicaid site before your renewal date rather than after.

Do work requirements apply to everyone on Medicaid? No. Exemptions cover pregnant women, people with disabilities, people in substance use treatment, and caretakers, among others. The reporting still reaches broadly, though, because an exemption usually has to be proved rather than assumed.

What can I do if I am cut off by mistake? Ask for a fair hearing. Every state has to offer an appeal, and if you file before the date your notice says coverage ends, your state generally has to keep the coverage running while the appeal is decided. Legal aid offices handle these cases free.

What about people who lost Medicaid during the COVID unwinding? Many of them still qualify. 70% of those disenrollments were procedural rather than a finding of ineligibility, so if you were dropped it is worth reapplying through your state Medicaid office or healthcare.gov.

Do undocumented immigrants get Medicaid? No. Federal law bars Medicaid coverage for undocumented immigrants except for emergency medical services in some states, and that emergency spending drops to each state’s regular match rate on October 1, 2026.

What you can do

1. Ask your governor whether your state is moving before January 2027. Nebraska, Montana, Arkansas, and Iowa went early. If yours is one of them, ask what it has built so that working people are not dropped the way one in four of the Arkansans covered by the 2018 rule were, and ask for the answer in writing.

2. Ask both senators to restore the $911 billion. The cut runs through provider tax limits, eligibility checks, and the work requirement, and each piece can be reversed separately. Ask which of the three they will vote to repeal.

3. Update your address and check your reporting date now if you are on expansion Medicaid. Most people who lost coverage in Arkansas and during the unwinding lost it over paperwork, not eligibility. Your state Medicaid office can confirm your renewal month and what it will accept as proof of hours.

4. Show up at your state budget hearings. Medicaid is close to 30% of the average state budget, and state legislators are deciding right now which services absorb the federal reduction. Public comment periods on those decisions are usually posted by the state Medicaid agency.

5. Write your representative using the letter below, and ask for a clear answer on whether they will vote to delay the January 2027 deadline until states can verify hours without dropping people who are working.